The pound against the dollar reaches its highest level in seven weeks in the hope of a Brexit deal

The pound sterling reached its highest level since the end of July on Friday, when the idea that Britain would not leave the European Union without a formal agreement was growing.

Shortly after eleven o'clock in the morning in London, the pound rose 1% to 1.2456 USD. The British pound is now up more than 4% against the dollar since September 3, when it reached its lowest level in three years.

The newspaper appeared in The Times newspaper as the main driver of purchases, suggesting that the Democratic Unionist Party soften its opposition to a backstop reserved for Northern Ireland.

The DUP has long rejected the backstop – an insurance policy against any tough border in Ireland – as part of the Brexit process. The leader of the DUP, Arlene Foster, once described the opposition of her party as a "blood red" line.

Foster again discredited Friday the prospect of a backstop reserved for Northern Ireland and ridiculed the Times' report, claiming that "anonymous sources lead to absurd stories".

Despite this rebuttal, the pound sterling is hanging on its gains and has even taken a new step higher.

Kit Juckes, chief foreign exchange strategist at Societe Generale, said in a daily research note Friday that the Times report had led some traders to hedge their short positions on the pound sterling. Short positions are where traders are betting against an asset, thinking that its price will fall in order to make a profit.

Juckes warned that it was now "very late in the day" for British Prime Minister Boris Johnson to enter into a new agreement that will satisfy lawmakers in Belfast, London and Brussels.

The recent rise in Sterling was bolstered by the adoption of a law on Monday aimed at preventing the UK from leaving the EU without any agreement on Oct. 31.

Prime Minister Boris Johnson said the law, drafted and voted by MPs from different parties, would tie his hands when she tried to negotiate with Brussels. It has been suggested that his government might ignore the law or find a loophole that allows the absence of any agreement to remain an option.

John Bercow, the outgoing Speaker of the House of Commons, said last Thursday that he would work to ensure that the government does not allow such leeway.

Bercow said he was ready to allow "additional procedural creativity" to ensure that MPs, not the UK government, have the final say on the final form of Brexit.

"If I have been unambiguous to this point, let me make it perfectly clear that the only form of Brexit we can have, whatever its position, will be a Brexit explicitly approved by the House of Commons. "said Bercow.

British Prime Minister Boris Johnson will meet with European leaders at a crucial summit on 17 and 18 October, during which he is expected to resume negotiations for an agreement on Brexit before the planned departure of the Great Britain on October 31st.

Earlier, he will meet on Monday in Luxembourg the President of the European Commission, Jean-Claude Juncker.